BUSINESS Xiaomi removed from US blacklist, yet clampdown on Chinese tech firms ongoing: experts

BUSINESS

Xiaomi removed from US blacklist, yet clampdown on Chinese tech firms ongoing: experts

Global Times

17:25, May 26, 2021

Xiaomi (File photo: VCG)

Chinese tech firm Xiaomi said Wednesday that it has been formally removed from the US blacklist, a baseless document published in mid-January, with Xiaomi reiterating that it is an open, transparent, publicly traded corporation.

According to a final order issued by the US District Court for the District of Columbia on Tuesday (US time), it vacated the US Department of Defense's designation of Xiaomi as a "Communist Chinese Military Company" (CCMC), and the court formally lifted all restrictions on US persons' ability to purchase or hold securities of the company.

Xiaomi is grateful for the trust and support of all its global users, partners, employees and shareholders, it said in a statement posted on the Hong Kong Stock Exchange on Wednesday under the name of its chairman Lei Jun.

Lei also posted a Sina Weibo on Wednesday, hailing "We won!" Chinese tech-related influencers including Changan Shumajun expressed their congratulations on the victory.

"It is hoped that more Chinese firms can shake off this US crackdown and the US government will treat Chinese firms fairly and equally," the blogger with nearly one million followers said, adding that the more important thing is that Chinese firms could rev up research and development on core technologies, making the US unable to brandish its sanction stick.

The Chinese smartphone vendor reiterated that it is an open, transparent, publicly traded, independently operated and managed corporation, and will continue to provide reliable consumer electronics products and services to users.

Despite the difficulties in challenging the US ban, Xiaomi's ultimate victory is within expectation since the Pentagon's blacklisting was "unconstitutional," so it could not hold water in the US where the rule of law principle is deeply pinned in the court, Chinese tech analysts told the Global Times.

"Xiaomi has set quite a good example for those firms that were still on the US blacklist to defend their interests by litigation, said Zhou Xibing, a veteran analyst who has followed the Chinese tech industry for years.

Apart from lawsuit, Zhou believed that Xiaomi's US suppliers, like Qualcomm, could have played some active role in the case through behind the scenes lobbying. "Chinese firms should also make efforts on this respect, to build an effective communications channel via local resources."

"More firms would be inspired by Xiaomi's win to challenge US discriminatory administrative orders or groundless ban," Zhou told the Global Times.

In mid-January, the former Trump administration added Xiaomi and eight other Chinese firms to a list of the so-called CMCC, the designation requiring US investors to divest their holdings in those firms by a March 15 deadline.

Chinese mapping technology company Luokung Technology Corp, also on the blacklist, sued the US government in early March, seeking to be removed from the blacklist by the deadline.

The NASDAQ-listed firm received temporary ruling from a US court on May 5, suspending the imminent investment ban.

Zhou warned, however, that Chinese tech firms should not relax mentally interpreting the US "friendly" move toward Xiaomi as easing its competition stance toward Chinese high-tech industries, although an outright truce seems far away.

The US de-blacklisting move of Xiaomi came after an early May announcement by Xiaomi saying it has reached an agreement with the Pentagon, with the latter agreeing to vacate its designation.

Xiaomi filed a complaint to a US court in late January seeking to be removed from the list. In March, a US federal judge temporarily halted enforcement of the blacklisting imposed under the Trump administration.

Separately, FTSE Russell said Tuesday that it will add Xiaomi and Luokung, a Chinese technology also put onto the blacklist, back to its global indexes.

Xiaomi will be added to FTSE GEIS in two tranches, with 50 percent added effective from the open on June 7, and 50 percent added from the open on June 21, FTSE said in a statement. While, Luokung will be added to FTSE GEIS in conjunction with the June 2021 review, effective from the open on June 21.

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